How Do Community Ecology and Structure Shape Digital Innovation Strategy?

Pondering whether, when, and how to innovate with digital technologies, managers are navigating a complex and dynamic landscape. To help with this challenging undertaking, we draw on organizational ecology and network theories to conceptualize the organizational communities that support digital innovations. Empirically, we analyzed news articles about Customer Relationship Management (CRM) and its stakeholders and found that organizations' strategy to provide or adopt the CRM technology depended on two ecological processes: (1) legitimation of CRM attracted organizations to enter the CRM community; (2) competition for resources deterred such entries. Further, more efficient structure of the community was linked to higher rate of entry by organizations to provide the CRM technology. This study brings organizational ecology theory from the population/industry level to the higher, community level, contributes a holistic perspective to the repertoire of theories on digital innovations, and demonstrates the potential to advance digital innovation strategy research along multiple dimensions.